Monday, October 31, 2016

Non-OPEC Yet To Pledge Concrete Oil Output Steps After Meeting OPEC

Non-OPEC producers made no specific commitment on Saturday to join the Organisation of the Petroleum Exporting Countries in limiting oil output levels to prop up prices - a stance that suggested they wanted OPEC to solve its differences first.

Officials and experts from OPEC countries and non-OPEC nations including Azerbaijan, Brazil, Kazakhstan, Mexico, Oman and Russia met for consultations in Vienna on Saturday and only agreed to meet again in November before a scheduled regular OPEC meeting on Nov. 30, they said in a statement.

A day earlier, OPEC members themselves were unable to agreed on how to implement a global deal to limit output after hours of talks amid objections by Iran which has been reluctant to even freeze its output levels, sources said.

"We have to agree on the real numbers," non-OPEC Kazakhstan's vice-minister of energy, Magsum Mirzagaliev, told reporters after seven hours of talks on Saturday.

"It is important that we meet once again with detailed numbers. We agreed that we have to meet in 3-4 weeks with numbers, because every country has his own opinion," he said.

OPEC and non-OPEC said in a joint statement the meeting on Saturday was a "positive development" towards reaching a global output limiting deal on Nov. 30.

Oil LCOc1 is trading closer to $50 a barrel, less than half its price of mid-2014, weighed down by persistent oversupply and squeezing the incomes of exporting nations.

Last month, OPEC agreed at a meeting in Algeria very modest production cuts, its first since 2008, in an effort to help prop up prices. But the cuts have yet to be finalised.

The meeting of OPEC experts, known as OPEC's High Committee, does not decide policy but will make recommendations to the next OPEC ministerial meeting on Nov. 30.

The meeting on Friday exposed old faultlines among OPEC members, especially the organization's de facto leader Saudi Arabia and its arch-rival Iran.

Tehran argues it wants to regain its oil market share it had lost during years of sanctions, which were eased earlier this year as part of a nuclear deal with the West.

Riyadh, which is fighting several proxy wars with Iran, including in Syria and Yemen, is reluctant to make concessions to Tehran.

Waiting For OPEC

OPEC members have not agreed between themselves on a single set of production figures from which to make the agreed cutbacks, and members including Iraq, Iran, Libya and Nigeria - whose output has been held back by sanctions or conflict - have asked ‎for special treatment in curbing output.

The last time OPEC persuaded non-OPEC nations to make joint cuts was as long ago as the start of the millennium.

Azerbaijan's energy minister Natig Aliyev told reporters before the start of the meeting he believed the global deal was still possible.

"Just one week ago we met with the president of Venezuela," he said, in reference to the south American OPEC member which has been pushing for measures to support prices.

"Venezuela and Azerbaijan agree that some measures will be taken to stabilize the market. We agreed the price of oil can be around $60 per barrel."

Brazil's representative said his country was attending only as an observer. "Brazilian production will increase in the next few years," said Brazilian official Marcio Felix.

Russia, one of the world's top producers, which has been supporting joint actions with OPEC, also attended the meeting in Vienna but made no public comment.

Two OPEC sources said Russian energy officials told the gathering that Moscow was still willing to freeze its output levels if OPEC agreed to cap its production.

"Russia is ready but they want to see in detail figures agreed for yesterday," one of the sources said. Another source said Russia would freeze if OPEC agreed to reduce output